Shanzhai (Chinese: 山寨; pinyin: shānzhài; Jyutping: saan1 zaai6; alternatively spelt shanzai or shan zhai) refers to imitation and pirated brands and goods, particularly electronics in China.[1] Literally "mountain village" or "mountain stronghold", the term refers to the mountain stockades of regional warlords or bandits, far away from official control. "Shanzhai" can also be stretched to refer to people who are lookalikes, low-quality or improved goods, as well as things done in parody.

Historically, "shanzhai" is sometimes used as a metaphor to describe bandits who oppose and evade the corrupted authority to perform deeds they see as justified. One example of such bandits is the story of Outlaws of the Marsh (水滸傳) [2]

The use of "Shanzhai" to refer to imitation products comes from Cantonese slang, in which "shanzhai factory" means an ill-equipped, low-end and family-based factory. However, with the accumulation of profit, quite a few of those factories invest a lot of money to improve their equipment. Some factories also get investment from someone other than family members. Nowadays, a significant portion of Shanzhai factories are no longer ill-equipped or family-based.

Their products are no longer poor-quality. Yet they still can not escape the fate of no-brand (or fake brand), not-for-sale in top department stores with non-shanzhai phones. One of the motivations for going 'Shanzhai' is the difficult regulations the Chinese government has established to become an official cell phone manufacturer. So to avoid the hassles companies try to operate under the radar. They can avoid taxes and regulation that way.

Another account of the origin is that because imitation electronic appliance manufacturers are largely located in Shenzhen, thus wholesalers from other parts of China started calling their products "Shenzhen product". Yet gradually "Shenzhen product" became "Shanzhai product" because they sound similar when people speak mandarin Chinese with a Cantonese accent.

The use of "shanzhai" became popular with the outstanding sale performance of "shanzhai" cell phones. According to Gartner’s data, 1.15 billion cell phones were sold worldwide in 2007, and according to data provided by the Chinese government, 150 million "Shanzhai" cell phones were sold in the same year, thus making up more than one tenth of the global sales.[3] In 2010 the Financial Times estimated that Shanzhai phones accounted for about 20 per cent of the global 2G mobile market.[4]

The market for "shanzhai" cell phones is not only in China, but also in the surrounding developing countries in Asia, and developing countries in Africa and Latin America. The outstanding sales performance of "shanzhai" cell phones is usually attributed to their low price, multifunctional performance and imitations of trendy cell phone design. Although "shanzhai" companies do not use branding as a marketing strategy, they are known for their flexibility of design to meet specific market needs. For example, during Barack Obama’s 2008 U.S. presidential election campaign, "shanzhai" cell phone companies started selling "Obama" cell phones in Kenya, with the slogan "yes we can" and Obama’s name on the back of the cell phone.[5] They also designed "Bird Nest" and "Fuwa" (福娃) cell phones in light of the Beijing Olympic Games.

Before the booming shanzhai cell phone industries, since the early 2000s, imitation electronic products like DVD players and MP3 players were already manufactured in the Pearl River Delta ("珠三角") area.[3] Many shanzhai cell phone companies accumulated their capital in that process. After understanding that many buyers like lookalike phones, but didn't need blaring fake logos, many manufacturers adopted a practice of not using fraudulent logos, instead opting for a generically designed logo. So while an overseas buyer can easily find a lookalike phone, some sellers only sell those without the fake logo.

Shanzhai cellphones can be sold at very low prices compared to normal cellphones. On average, the imitations sell at retailers at about $US100-$US150, while production costs are about $US20.[6]

Shanzhai cell phone factories are able to manufacture at a very low cost for two reasons, they do not buy cell phone manufacture licenses from the Chinese government, thus saving all the related costs.

One company that earned notoriety for producing shanzhai smartphones is Goophone, which in 2012 was reported to have filed a patent for the "Goophone i5", a MediaTek-powered clone marketed prior to the real iPhone 5's official release.[7]

Although there are many fake garments, watches, bags, and shoes in China, they are not called "shanzhai" products, perhaps because these fake products came into existence earlier than fake cellphones and the newer use of the term "shanzhai". "Shanzhai" cell phones may stand out as the most successful and most often discussed "shanzhai" products, because cell phones strongly symbolize wealth in china, but they are much more affordable than other symbolic signs of wealth like cars and apartments.

Quite a few shanzhai cell phone companies tried to exploit the market by making shanzhai Netbooks, but these gained little market acceptance and sales.

"Shanzhai" electric cars, which run on lead-acid batteries and sell for as little as $US2000-$US3000, are being produced in the Shandong province.[8]

In January 2011 the Chinese Ministry of Industry and Information Technology and the State Administration of Industry and Commerce announced a crackdown on shanzhai phone sellers and manufacturers. The administration blamed "money-stealing" services that used the cheap phones to steal services using customers' SIM cards. Industry commentator Liu Sheng said that it was more likely to be linked to the country's intellectual property rights protection campaigns.[9]

Shanzhaiism (山寨主義) is a philosophical term denoting a Chinese style of innovation with a peasant mind-set.

Shanzhaiism has an equivalent English term: tinker. Lacking a garage, they build products in villages in the mountains that have stockade houses. However, with shanzhaiism in mind, people can produce fake and pirate products in a massively organized way.

Shanzhaiism can be analyzed using a term coined by Jean-Paul Sartre: Bad faith. Fake and pirate products are produced. For example, there was once a so-called Fake-One Road[10][11] (山寨一條街) in China.[12][13]

This kind of phenomena is not confined to fake products. The mind set of shanzhaiism even extends to advertisements. For example, a shanzhai phone advertisement uses the president of the United States, Obama, to promote its shanzhai products.

The frequent reference to shanzhai cell phones on internet and in traditional media made people start labeling low-cost imitation cultural activities as shanzhai as well. Some of the most well-known events include the Shanzhai National Spring Gala ("山寨春节联欢晚会"), Shanzhai Lecture Room ("山寨百家讲坛"), Shanzhai Olympic Torch Relay ("山寨奥运火炬传递"), and Shanzhai Nobel Prize ("山寨诺贝尔奖"). One thing these events have in common is that they all imitate high-end, popular yet authoritative events in which grass-roots power usually has no participating role.

While the purpose of the above-mentioned shanzhai events is arguably just for the participants to have fun and to experience being the authority, other shanzhai cultural phenomena, like the shanzhai products, are profit-oriented. For example, some low-end performing agencies will hire people who look like pop stars to perform in rural areas, where people cannot afford to watch the actual stars. Thus shanzhai Jay Chou ("山寨周杰伦"), shanzhai Andy Lau ("山寨刘德华") and shanzhai Faye Wong ("山寨王菲") appear in many underdeveloped places in China.

Shanzhai movies are another profit-driven shanzhai phenomenon. These movies usually have low budgets, yet achieve commercial success by parodying, making fun of or borrowing elements from high-end Hollywood blockbuster movies. One of the first shanzhai movies is Ning Hao’s (宁浩) Crazy Stone (疯狂的石头). It imitates the multi-angle shooting, rapid cutting and stunts that are usually used in Hollywood action movies, yet it retains the grass-roots Chinese set up. With a 3 million Hong Kong dollar budget, Crazy Stone achieved 22 million-box-office revenue. Following its success, shanzhai movies like "the Big Movie" series ("大电影"系列") and No.2 in the World ("天下第二") were made. Some also argue that Hollywood parody movies like Scary Movie are the true inspirational force behind shanzhai movies.[14]

The heated online debate about whether shanzhai should be encouraged or denounced is arguably due to Ni Ping (倪萍), a well-known CCTV host's proposal during the Lianghui (two conferences) this year.[which?] She proposed to establish relevant legislation that will eliminate the shanzhai phenomenon by arguing that the copycat culture associated with shanzhai will stifle genuine creativity and hamper awareness of property rights. While some agree with her, others point out that in order to give objective comment on the shanzhai phenomenon, one has to distinguish shanzhai products from pirated products and shanzhai culture from shanzhai products. They also argue that although many shanzhai culture events manifest themselves as copycat events, some also have true original elements. Western media like the Wall Street Journal[15] and the New Yorker[16] have reported about the shanzhai phenomenon and presented it as a form of rebellion and resistance to the mainstream culture.